ERP is based on the premise that the production plans of the company should derive from the decisions of almost all the other parts of the company. This means that no functional area of a company must or should operate in an isolated manner. These systems generally use a common data base; therefore, the key information used to take decisions will be available to all key functions. The characteristics of ERP systems are that they must be integral -allowing all departments of the company to relate between them-, modular -roles divided by module: sales, materials, finance, production, etc.- and adaptable depending on the idiosyncrasy of each company ( Velasco and Campins, 2013 , p. 155).
Published in Chapter:
Organizational Components That Explain Profitability as a Key Factor of Competitiveness: Colombian SMEs' Case
Maria Teresa Ramirez-Garzon (La Salle University, Colombia),
Rafael Ignacio Perez-Uribe (EAN University, Colombia), and Rafael Espinosa-Mosqueda (University of Guanajuato, Mexico)
Copyright: © 2020
|Pages: 28
DOI: 10.4018/978-1-5225-9425-3.ch002
Abstract
This chapter explains one of the hypotheses of the results of a basic research of the Ramírez-Garzón doctoral thesis entitled, “Organizational components that explain the profitability of Colombian SMEs,” which focused on the application of the Model of Modernization for organizational Management (MMOM) and the Return on Assets (ROA) in 144 Colombian SMEs. The chapter affirms there are organizational components that explain profitability in Colombian SMEs as a key factor for business competitiveness. The multiple regression analysis was used as a statistical method to correlate the organizational components of the MOMM and the ROA of those SMEs. It was found that the components that explain preferentially between 20% and 23% the profitability of the companies analyzed in light of the ROA are: strategic direction, production management, human management, logistics, and innovation and knowledge.